Singing All the Way to the Bank
Business professor John Inzero explains how Jimmy Buffett built a billion-dollar empire by selling a state of mind.
For nearly 50 years, Jimmy Buffett has been singing about the joys of leading a laid back, carefree lifestyle. But behind his devil-may-care stage persona is a shrewd businessman, says John Inzero, an adjunct professor of marketing and international business.
Long before the music industry realized there was more money to be made selling tchotchkes and concert tickets than albums, Buffett was leveraging his fans’ desire to experience his brand of escapism by selling them all the accoutrements associated with it.
Today, Parrotheads, as Buffett’s fans are known, can buy everything from clothing to pickleball paddles to homes in gated communities—all licensed and marketed by his company, Margaritaville. This has made Buffett a very rich man.
Inzero, who enjoyed a successful career “selling things people want but don’t need” before coming to teach at Monmouth in 2016, says business students can learn a lot from Buffett’s business ventures. He recently published a case study, “Inventing Margaritaville: How a beach loving singer songwriter built a business worth more than $1 billion,” in The Journal of Business and Economic Studies. He shared with us some of his insights on how Buffett built his tropical-themed empire.
How did the idea for this research come about?
My wife and I were sitting on the patio sipping margaritas, and she said to me, “Play some Jimmy Buffett.” So I put on Radio Margaritaville (from SiriusXM), and we heard an ad for Latitude Margaritaville, which at the time was a new 55-plus community he was opening. They called it “55 and better!” And I thought that’s genius because so many of the people you see at his concerts, who have been following him all these years, are now in that age group.
So that struck a spark, and I started doing some research on his businesses and the escapist lifestyle he was selling. Then a few months later, Wheel of Fortune had an entire week during which the sole prize provider was Margaritaville. And I thought, that’s the hook. That was what tied it all together and made this case study important.
It made sense when you think about who the audiences are. Wheel of Fortune’s audience skews older and female, which is the same as Buffett’s. It showed he understood the demographics and psychographics of his fans, many of whom are Margaritaville customers.
How important is that in business?
There are three main academic themes that I get at in my case study. The first is the importance of knowing your unique selling point, or USP. What makes you different from everyone else who is out there? The next is brand positioning. It’s a crowded marketplace, so you have to establish your ground and stay on it. The third is the importance of knowing who your customer is. I used to tell the people who worked for me that the single most important question in marketing is, who’s our customer?
How does Buffett’s business empire measure up in that regard?
His Margaritaville brand is built on selling the escapist lifestyle he’s been singing about for years. If you go back to his live album You Had to Be There from 1978, he says on it, “People ask me, where the hell is Margaritaville? And I go, ‘It’s anywhere you want it to be.’” That’s the point. Margaritaville is not a place; it’s a state of mind. And once you get this, you realize it’s a place that you want to be at—an escape and getaway from our everyday lives.
Now he’d been playing concerts forever and had developed this really tight-knit following—the Parrotheads. Over time, the demographics of his audience evolved. It was no longer people sitting on the beach listening to him. It was professionals— people with tough jobs and, sometimes, tough family lives too—looking for that two-hour-plus escape. You’d see it in the parking lots before concerts where people wore tropical-themed shirts and had inflatable shark hats and wading pools. That wasn’t stuff Buffett was selling; people were buying it to go to his concerts.
So this concept of escape grew and became bigger than the music itself. Buffett has a good business mind. He saw it happening and realized it wasn’t a fad. Fads come and go. He knew this was a trend, and he was smart enough to figure out how to be both ahead of and driving the trend, selling this very specific lifestyle. Now it’s more than just hats and clothing he’s selling. It’s stuff for home, stuff for your yard. You can buy your Margaritaville drinks and mix them in your Margaritaville blender. There are Margaritaville resorts all over the world. And that grew into the 55-plus communities. People who broke their backs working all their lives could now relax and escape. And if you look at the communities themselves, the decor, the colors, and the activities for residents all tie in with the brand, that tropical escapist concept.
In your case study, you write how even Buffett’s music is “on brand.” That seems like something most musicians would balk at.
It’s the nature of music to experiment, and everybody has a different sense of where they want to go with it. Bob Dylan was the original folkie. Then he went electric, went back to blues, played “Dust Bowl Ballads,” and moved on to American standards. Springsteen experiments too: He did rock, then folk, then more introspective things with a nod to Pete Seeger and Woody Guthrie, and then he went back to rock. Paul Simon is all over the place, from New York City to world music.
But Buffett is a fastball down the middle. He doesn’t really experiment. He’s as much of a musician as anyone else; he just does it within the context of his escapist, tropical theme. I think that was smart because that’s brand positioning.
When I talk about integrated marketing communications in class, the lesson for students is that your message, no matter the medium, has to be the same. Otherwise, your market is going to get totally confused. It’s very clear what Buffett’s message is.
It’s not unusual for musicians to sell T-shirts and concert tickets. But is there anyone besides Buffett who’s had such success selling this sort of all-encompassing lifestyle?
Not that I’ve seen. When you think about the range of things he’s selling, he’s really selling a way of living. And I don’t know that there’s been another musician who has done that. You can buy a Bob Dylan T-shirt, but who has a Bob Dylan lifestyle? Frank Sinatra was crazy huge, and maybe people occasionally wore a fedora, but you didn’t decorate your home like Sinatra.
It all comes back to that concept of escape. It’s a very specific lifestyle. He saw it happening and built it continually from there.
Buffett is in his mid-70s and can’t go on touring forever. What happens to the Margaritaville brand when he retires?
Margaritaville Enterprises did something smart by not using Buffett as the visual of the brand. Obviously he’s the focal point, but when you see Margaritaville, you see a parrot. That can be anybody, male or female. That’s the emblem of the message the company is trying to get across.
Look at what happened when Walt Disney wasn’t around anymore. I’m talking about the original Walt Disney Company, before it started buying everything up. Disney did a lot of the same things, tying its brand into leisure. It has hotels, cruises, clothing, and other things like that. There isn’t anything after Disney because it’s sui generis—it’s unique. The same applies to Margaritaville in my mind. It’s all about the theme. If you keep the dream of escape—of getting away from all of the craziness we deal with—alive, I don’t see any reason it can’t continue.